Almost Half of Warren Buffett-led Berkshire Hathaway's $365 Billion Portfolio Is Invested in Only 1 Stock

L4sBot@lemmy.worldmod to Technology@lemmy.world – 82 points – Almost Half of Warren Buffett-led Berkshire Hathaway's $365 Billion Portfolio Is Invested in Only 1 Stock
finance.yahoo.com

Almost Half of Warren Buffett-led Berkshire Hathaway's $365 Billion Portfolio Is Invested in Only 1 Stock::This tech giant has made for a wonderful investment in recent years.

29

You are viewing a single comment
View all comments

This is what makes me contemplate whether or not he is a good investor. I mean, he played it too safe, and got lucky with Apple.

His huge boner for Apple has to do with the obscene amount of cash they have on hand. I think his feeling is that they have the capacity to self-finance massive innovations without the need to issue/dilute stock.

They have the cash to immolate and outlast any competition, more like.

He's 93. He hasn't gotten by on luck alone for the 82 years he's been investing (Yes, he bought his first stock at 11). His essential strategy and advice are solid.

That's the thing with odds though. In any random chance distribution of 100 people, there will be 1 ranked higher than the other 99. We as a society ignore the 99 and focus on the 1 "genius" but statistically someone was going to be in that spot. If he wasn't lucky he just wouldn't be famous.

So you think it's most likely random chance that this guy that's literally a 1 in a 100M for wealth got rich?

If something has a 1 in 100M chance of happening to someone, you’d expect that about 80 people in the world now have had that thing happen to them.

Don't mistake statistics for reality. Statistics describe reality, they don't dictate it.

In this situation, there could be a 1:100M chance for any random investor to be this successful. Or there could be a 1:3 chance but you need to meet specific criteria, which he and only a few others have.

You can't describe a situation with dice rolls unless you're very sure what kind of dice you're rolling.

I was responding to purely hypothetical odds that someone just made up, in which case things can be as complicated or simple as one wants them to be.

But even if I were making an actual prediction based on real statistical data, I am not sure why you would think that having an expectation of the approximate distribution of something given what we know about its statistical likelihood is “mistaking statistics for actual reality”.

This would assume he’s making random picks and getting lucky. He’s not. He’s the most successful “Value Investor” of which his mentor Benjamin Graham is considered the father of. The advice isn’t a secret, it’s all out there.

It's not assuming he is making random picks. It's saying that the stock market is a random walk, which is just a fact. He is making picks based on a system, but if that system was actually proven to find underpriced stocks, everyone/enough people would also follow the same strategy and build that value into the price, removing whatever advantage he once had.

If he's successful because he's a "value" investor, why aren't all of the other "value" investors just as famous and successful? It's because the difference between two people doing the same thing, is luck.

Other people do. It’s not a get rich quick scheme, so it’s hard to beat 80 years in the market. He avoids a lot of stocks that do very well too. I’m not saying following every move he makes will make you rich, I’m saying his general advice and strategy works.